Collusion allegation: AUS bank and franchisor

September 18, 2008

In a Smart Company article by James Thomson called MP renews calls for investigations into mistreatment of Bakers Delight franchisee, he quotes:

NSW parliamentarian Joanna Gash has renewed calls for the Australian Federal Police to launch an investigation into accusations Bakers Delight and ANZ bank colluded to put a franchisee out of business.

Quoting emails between the franchisor and the bank, Gash alleges:

On Monday, Gash revisited the case in Parliament, producing emails from Bakers Delight chief financial officer Richard Taylor and ANZ executives that she says shows “plans had been conspired to terminate Ms de Leeuw’s franchise well ahead of time”.

The bank and franchisor deny all the allegations.

This is the first public AUS public allegation of the key franchisor:franchise banker relationship that I identified and wrote about in a 2005 paper for Industry Canada called Franchising Opportunism [free download].

The Royal Canadian Mounted Police did a 10 month investigation of a related predatory franchise lending matter. [free download: Mounties investigate ‘predatory lending’, Ottawa Citizen, March 25, 2006]

And Mr. Oudovikine is accusing the bank of transferring the loans to Country Style without his authorization before he had a chance to obtain a business plan and other financial details from Country Style.

Mr. Oudovikine says his case shows how big banks, franchisors and franchise brokers team up to take advantage of franchisees, many of whom are recent immigrants like him.

“It’s predatory lending. (CIBC) didn’t do any of the due diligence they should have done,” says Mr. Oudovikine, who sent the Citizen e-mails confirming the RCMP investigation. An RCMP official said the police force doesn’t confirm or deny investigation.

And the Canadian bank’s reaction?

Mr. Oudovikine says he has repeatedly contacted senior CIBC officials and executives about the loan dispute, to little effect. He alleges that CIBC breached the Canada Small Business Financing Act regulations that require lenders to conduct due diligence on borrowers, including their ability to repay loans.

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Oz FCA franchisor and bank Linked in a Conspiracy?

September 2, 2008

In yesterday’s House of Representatives, Australian member of parliament Joanna Nash (Lib, Gilmore) read the following statement into the record:

In closing I would like to read into the record three succinct extracts from emails in regard to Baker’s Delight, and these can be produced.

The first is from Richard Taylor, Chief Financial Officer of Bakers Delight, to Simon Brookhouse, the Victorian and Tasmanian franchise manager for the ANZ Bank, dated 22 February 2005 in regard to Ms Deanne DeLeeuw who was still an active franchisee at the time. It read:

The South Coast bakeries group heads closer and closer to oblivion.
Is that not evidence that suggests plans had been conspired to terminate Ms DeLeeuw’s franchise well ahead of time?

The second email is from Jurgen Schnabel, Senior Manager of the ANZ Bank, in an email dated 10 March 2005. He wrote:
… we will accept whatever Bakers Delight decides to give us from the sale of Kiama and Vincentia, without question.
Does this not constitute some degree of collusion towards the premature but planned demise of this franchisee?

And finally:
… we have to consider the greater relationship with Bakers Delight given our overall exposure to this group within PM.
That was in an email from Simon Brookhouse of the ANZ Bank dated 10 March 2005. This was when the ANZ agreed to accept a nil return from Bakers Delight for the Shellharbour franchise.

These allegations have not been proven in a court of law.

  • Baker’s Delight is a member of the Franchise Council of Australia, FCA.
  • ANZ Bank is a member of the Franchise Council of Australia, FCA.

There is a very close relationship between franchisors and lending institutions in Canada (see Big Franchising, Red Flags: Predatory franchise lending, Suing a Bank (2)).


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